Aspire Impex Private Limited v. Welspun Poly Buttons Private Limited

1. This joint Application has been filed under Sections 391 to 394 of the Companies Act, 1956 read with Rules 6 & 9 of the Companies (Court) Rules, 1959 by the applicant companies seeking directions of this court to dispense with the requirement of convening the meetings of their equity shareholders, secured and unsecured creditors to consider and approve with or without modification, the proposed Scheme of Amalgamation of Aspire Impex Private Limited (hereinafter referred to as the transferor company) with Welspun Poly Buttons Private Limited (hereinafter referred to as the transferee company). 2015:DHC:4717

2. The registered offices of the transferor and transferee companies are situated at New Delhi, within the jurisdiction of this Court.

3. The transferor company was incorporated under the Companies Act, 1956 on 3rd February, 2010 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.

4. The transferee company was originally incorporated under the Companies Act, 1956 on 27th May, 1991 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi under the name and style of Welspun Poly Buttons Private Limited. The company changed its name to G.D. Goenka Global Private Limited and obtained the fresh certificate of incorporation on 17th February, 2000. The company again changed its name to Welspun Poly Buttons Private Limited and obtained the fresh certificate of incorporation on 5th July, 2004.

5. The present authorized share capital of the transferor company is Rs.10,00,000/- divided into 1,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid-up share capital of the company is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each.

6. The present authorized share capital of the transferee company is Rs.7,00,00,000/- divided into 50,00,000 equity shares of Rs.10/- each aggregating to Rs.5,00,00,000/- and 20,00,000 12% redeemable preference shares of Rs.10 each aggregating to Rs.2,00,00,000/-. The issued, subscribed and paid-up share capital of the company is Rs.1,82,61,680/- divided into 17,44,168 equity shares of Rs.10/- each fully paid-up aggregating to Rs.1,74,41,680/- and 4,10,000 equity shares of Rs.10 each Rs.2/- paid up aggregating to Rs.8,20,000/-.

7. Copies of Memorandum and Articles of Association of the transferor and transferee companies have been filed on record. The audited balance sheets, as on 31st March, 2014, of the transferor and transferee companies, along with the report of the auditors, and the provisional accounts, as on 31st March, 2015, of the transferor and transferee companies have also been filed.

8. A copy of the Scheme of Amalgamation has been placed on record and the salient features of the Scheme have been incorporated and detailed in the application and the accompanying affidavit. It is claimed by the applicants that the proposed amalgamation would lead to consolidation and simplification of holding structure; reducing operating and compliances cost; and achieving operational and management efficiency. It is further claimed that the amalgamation will improve organizational capability arising from the pooling of human capital that has diverse skills, talent and vast experience.

9. So far as the share exchange ratio is concerned, the Scheme provides that, upon coming into effect of this Scheme, the transferee company shall issue and allot preference shares to the shareholders of the transferor company in the following ratio:- “164 fully paid up preference shares of Rs.10/- each of the transferee company for every 01 equity share of Rs.10/each held in the transferor company.”

10. It has been submitted by the applicants that no proceedings under Sections 237, 243, 247(1A), 250A and 251 of any other applicable provisions of the Companies Act, 1956 or 210, 212 (1) to (7) & (11) to (17), 214, 215, 216 (1) & (3), 217, 219, 220, 223, 224 (1), (3) & (4) and 225 or any other applicable provisions of the Companies Act, 2013 are pending against the applicant companies.

11. The Board of Directors of the transferor and transferee companies in their separate meetings held on 15th December, 2014 have unanimously approved the proposed Scheme of Amalgamation. Copies of the Resolutions passed at the meetings of the Board of Directors of the transferor and transferee companies have been placed on record.

12. The transferor company has 02 equity shareholders and 01 unsecured creditor. Both the equity shareholders and the only unsecured creditor have given their consents/no objections in writing to the proposed Scheme of Amalgamation. Their consents/no objections have been placed on record. They have been examined and found in order. In view thereof, the requirement of convening the meetings of the equity shareholders and unsecured creditor of the transferor company to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Amalgamation is dispensed with. There is no secured creditor of the transferor company, as on 8th January, 2015.

13. The transferee company has 06 equity shareholders and 50 unsecured creditors. All the equity shareholders and 46 out of 50 unsecured creditors, being 92% in number 99.84% in value, have given their consents/no objections in writing to the proposed Scheme of Amalgamation. Their consents/no objections have been placed on record. They have been examined and found in order. In view thereof, the requirement of convening the meetings of the equity shareholders and unsecured creditors of the transferee company to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Amalgamation is dispensed with.

14. The transferee company has 03 secured creditors having secured debt of Rs.3,74,50,605/-. The consents of these secured creditors have not been placed on record. Learned counsel for the applicants submitted that the Scheme is not prejudicial to the interest of these secured creditors and the Scheme neither contemplate any variation of the right of these creditors nor does it contemplate extinction or reduction of their liability. He has further submitted that the payment due to these secured creditors would be settled in regular course as per the payment cycle of business, post amalgamation. He has also submitted that assets transferred from the transferor company to the transferee company will be more than the liabilities transferred on merger and will be sufficient to discharge the liabilities transferred. He has also submitted that the amalgamation will have no negative impact on the net worth the transferee company and, in fact, the net worth of the transferee company will increase from Rs.97.54 lakhs to Rs.261.54 lakhs, post amalgamation. In support of his submission, he has placed on record a certificate dated 13th May, 2015 issued by Bask & Associates, Chartered Accountants, showing the pre and post amalgamation net worth of the transferee company. He, therefore, prays that the requirement of convening and holding the meeting of the secured creditors of the transferee company may kindly be dispensed with.

15. A perusal of the audited balance sheet of the transferor and transferee companies, as on 31st March, 2014, reveals that the companies have reserves and surplus of Rs.1,62,60,918/- and Rs.78,67,823.80 respectively. As per the certificate issued by Bask & Associates, Chartered Accountants, the post-amalgamation net worth of the transferee company will increase from Rs.97.54 lakhs to Rs.261.54 lakhs. In the Net Worth Certificate, the Chartered Accountants have also opined that the interest of the secured and unsecured creditors of the transferee company are not likely to be adversely affected by the proposed Scheme and the company would be in a better position to discharge all its liabilities upon sanction of the Scheme. In view thereof, the rights of the secured creditors of the transferee company are not likely to be affected and the transferee company will be in a position to discharge all its liabilities, upon sanction of the Scheme of Amalgamation. In view of the above, the requirement of convening and holding the meeting of the secured creditors of the transferee company to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Amalgamation is dispensed with.